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Friday, November 03, 2006

Bad Economy?

Okay, what the heck… I just need to stop listening to NPR at all. There are no redeeming qualities that they posses, especially in their election coverage. I have no illusions that the republicans have drifted way too far to the evangelical camp and will probably loose the House or Representatives. But when they talk about the economy, I can’t take it any more.

We are currently living under some of the best economic conditions that we have had in the past twenty years. National unemployment is at 4.4%. The economy is growing at a sustainable rate. Taxes are low. The government’s tax receipts are up (because of the low taxes.) And mortgage rates are still well within reach of a great many homebuyers.

When these east-coast elitists go and talk to unemployed, uneducated, unskilled factory workers in the upper Midwest and then blame the Bush administration for our “failing economy” and the worker’s unemployment. The reason these workers are unemployed is because the company they (used to) work for could no longer afford to pay them the wage than they demanded. There is no logical reason that some guy who puts lugnuts on wheels should make $45,000 a year, have free health care, and 4 weeks of paid vacation.

But somehow, starting in the late 1940’s, labor unions beat up their employers for more and more pay.

Well, the labor union’s habit of wanting more, no matter what the cost, has finally backfired on them. The company’s they harassed and blackmailed into submission have finally had more than they can take and are starting to go under. They can no longer afford to pay these exorbitant wages to unskilled workers.

So what happens? The high paid workers get laid off. (Since you can’t fire a union worker.) Their jobs get outsourced to lower cost factories on another continent. They get replaced with robots. Etcetera, etcetera. It’s not that hard to fathom that when a company cannot remain competitive, they will do something to fix it.

But they often can’t just stop paying their union workers. They have to pay benefits; pensions; health care. So they end up paying money for zero productivity. And this opens the door for Japanese auto makers, who do not hire union workers and therefore have substantially lower overheads, to step in, make their cars in America, and gain market share. This further hurts the big, union auto makers, and the cycle continues.